Building the innovation capabilities of small-medium suppliers in the supply chain

Presently, suppliers put great efforts on developing certain innovative capabilities in order to improve their competitiveness in the marketplace. The hypothesis is presented in this paper that the level of investment in technology and the acquisition of specific managerial capabilities are, to a large extent, a determinant of supplier-customer interdependence. To provide the solid support to this hypothesis, a study of 197 suppliers operating in the packaging machinery industry in China has been conducted while the structural equation modelling and multiple hierarchical regression are applied to reveal the relationship between suppliers' innovation capability and their different roles in the supply chain.